The white metal market has exploded over the past two weeks. Spot prices have surged to a historic high of $93 per ounce, which is a huge blow to solar panel manufacturers who are already struggling in a capacity glut.

You may not realize how terrifying the cost share of trace amounts of silver used in solar panels really is. According to the latest data, silver now accounts for 29% of the total cost of a single panel. Compare this with the figures from earlier: only 3.4% in 2023, and 14% last year. This rapid increase, frankly, is just cutting into manufacturers' margins.

Manufacturers can no longer sit still. First, they are considering raising prices to cover the losses, while also accelerating R&D to replace silver with cheaper materials like copper. But the problem is, the industry has been stuck in a loss-making quagmire for over two years. Factories that expanded aggressively in recent years are now engaged in price wars and have no bargaining power.

The response in the Chinese market tells the story. Domestic component manufacturers have already pushed prices above 0.8 yuan per watt this week, an increase of 1.4% to 3.8% month-on-month. In dollar terms, a 500-watt panel now sells for around 400 RMB. This is not the final figure; several leading solar companies have already issued early warnings.

The real issue is that manufacturers have long been squeezed to the point where they have no buffer space left. Two years of depressed market prices have nearly wiped out profits, and now, with commodity prices rising, passing on costs has become almost the only way to survive.